Ginnie Mae has announced that it is changing the Servicing Fee Margin for the home equity conversion mortgage (HECM)-backed securities (HMBS) program. Currently, Ginnie Mae issuers have the option of choosing from two servicing compensation methods for the HECM, a monthly flat servicing fee or a basis point strip of the interest. Effective July 1, 2011 and forward, Issuers must select the basis point strip, with a minimum Servicing Fee Margin of 36 basis points, which includes Ginnie Mae’s six basis point Guaranty Fee. Current Servicing Compensation Methods Effective for July 1, 2011 and Forward 1. Monthly Flat Servicing Fee (6-75 bps) 1. No longer an option 2. Basis point Servicing Fee (25-75 bps) 2. Basis point Servicing Fee (36-150 bps) The new spread between the note rate and the rate at which the HMBS participation accrues interest, must be at least 0.36 percent (36 bps), but no more than 1.50 percent (150 bps), including the six bps for the Ginnie Mae Guaranty Fee. The applicable changes to Ginnie Mae Mortgage-Backed Securities Guide 5500.3, Rev. 1 (Guide), will be posted under the “What’s New” section of Ginnie Mae’s Web site prior to June 1, 2011. These changes will be officially incorporated into the Guide on July 1, 2011.